What is an FHA loan?

An FHA loan is insured by the Federal Housing Administration (FHA) and issued by an FHA approved lender.  These loans were made for low-to-moderate income consumers, and they offer options to borrowers with lower minimum down payments and lower credit scores.  Many think FHA loans are just for first-time homebuyers, and while they are a great option for first-time homebuyers, they are also a good option for those without perfect credit or significant cash assets.

Who qualifies for FHA loans?


  • Homebuyers with lower credit scores- min 550 credit score
  • Minimum down payment of 3.5% of the purchase price
  • Individuals with low-to moderate-incomes
  • First time home-buyers

Benefits of an FHA loan:


  • More flexible qualification requirements than other home loan types
  • Down payments as low as 3.5%
  • Lower credit score requirements
  • Higher maximum debt-to-income ratios
  • Less closing costs

FHA is a great option if you are a first time home buyer, have less than stellar credit, or not a lot of cash assets.